In May, global stock markets rose broadly, closing near records, while volatility fell to low levels. The rally was driven by a few companies and rested more on hopes for peace in the Middle East than on resolved conflicts.
Crescit Hedge performed well in that environment. The fund rose +1.85 percent during the month and took the year to +4.46 percent. The result came primarily from long call options on the US and Europe, as they increase in value when the indices do but can never lose more than the premium we paid. The protective legs paid as expected when the market rose.

During the month, we rolled exposure to longer call options expiring in December, to maintain participation in a continued rally at a lower cost while maintaining protection. With cheap protection and a market pricing in calm that is not yet secured, we remain prepared for a rebound, but are in if the rally continues.